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News

Consumer Credit Lending at its Highest in Almost 3 Years

October 10, 2014

Today the UK’s leading financial capability charity The Money Charity releases The Money Statistics, giving an overview of the financial situation in the UK.

New statistics from The Money Charity can reveal consumer credit lending is at its highest in nearly 3 years. In August, the average consumer credit lending was £6,155 per household; this is up £161.66 per household on the same month, last year.

This new figure represents the highest consumer credit lending since November 2011 and has increased every month for the past 9 months, as the graph below illustrates.

Based on figures from the Bank of England, The Money Charity’s calculations also show that total lending per household, including mortgages, has increased by £996 over the year. This meant that the average debt per household was £55,088 in August.

Michelle Highman, Chief Executive of The Money Charity comments:

“An increase in consumer lending is always one of the more ambiguous economic indicators. On the one hand, it could be a positive sign that people are feeling more confident about their job, the economy, and their ability to access and use credit wisely. On the other hand it could mean the opposite, that people are being driven to take on more and more credit just to make ends meet.

Either way, with an imminent rise in interest rates, even the most financially secure amongst us need to ensure that they understand that their repayments are likely to rise and that they have plans in place to cope. Creating a budget is one of the best ways to help manage your money in order to tackle debt, rein in your spending and even start saving. The Money Charity has a range of free tools and resources to help you get on top of your money (themoneycharity.org.uk).

If you do feel you need to take on more debt just to cover the basics, before you do, pick up the phone to StepChange or one of the other free debt advice charities who will be able to help you properly assess your options.”

Latest figures include:

£55,008: average household debt (including mortgages) in August, up from £54,981 in June

6.7%: percentage of household pre-tax income saved

£521: average annual increase household debt per UK adult

6,405: new debt problems dealt with by Citizens Advice Bureau every working day

£115,940: average mortgage size for households with mortgages

1,000: number of people who became redundant every day between May and July